Financial Instruments |
3 Months Ended |
|---|---|
Jan. 31, 2017 | |
| Notes to Financial Statements [Abstract] | |
| Fair Value Measurements | . Financial Instruments Fair Value Measurements Our financial assets and liabilities consist principally of cash, accounts receivable, accounts payable, debt, foreign exchange forward contracts, interest rate swaps and contingent consideration payable. The estimated fair value of cash, accounts receivable and accounts payable approximates their carrying value. The estimated fair value of our debt approximates the carrying value because the interest rate on such debt adjusts to market rates on a periodic basis. Contingent consideration payable, assets held for sale, interest rate swaps and foreign exchange forward contracts are recorded at estimated fair value. During the three months ended January 31, 2017, there was no material change in the items we measure and record at fair value on a recurring basis. Additionally, there were no transfers between levels of the fair value hierarchy in the three months ended January 31, 2017. Fair Value of Contingent Consideration Payable The fair value of contingent consideration payable totaled $6.0 million at both January 31, 2017 and October 31, 2016, and is comprised of amounts payable related to acquisitions. We evaluate changes in the assumptions used to calculate the fair value of contingent consideration payable at the end of each period. The maximum liability on contingent consideration payable is indeterminate because it is based on contributions from the acquired businesses. Derivative Financial Instruments Interest Rate Swap Agreements Designated as Cash Flow Hedges We use interest rate swap agreements to hedge the variability in cash flows related to interest payments. As of January 31, 2017, we have outstanding interest rate swap agreements to effectively convert $500.0 million of the term A loan from a floating rate plus applicable margin to a fixed rate of 1.20% plus applicable margin through March 30, 2018. The principal amount under the term A loan covered by the interest rate swap agreements will decrease to $450.0 million from April 1, 2017 through September 30, 2017 and $400.0 million from October 1, 2017 through March 30, 2018. In addition, we have outstanding an interest rate swap agreement to effectively convert $350.0 million of the term A loan to a fixed rate of 0.975% plus applicable margin from March 30, 2018 through June 30, 2019. The interest rate swaps qualify for hedge accounting treatment as cash flow hedges. The notional amounts of interest rate swap agreements outstanding as of January 31, 2017 and October 31, 2016 were each $500.0 million. Foreign Exchange Forward Contracts Not Designated as Hedging Instruments We arrange and maintain foreign currency exchange forward contracts so as to yield gains or losses to offset changes in foreign currency denominated assets or liabilities due to changes in foreign exchange rates, with the objective to mitigate the volatility associated with foreign currency transaction gains or losses. Our foreign currency exposures are predominantly inter-company receivables and payables arising from product sales and loans from one of our entities to another. Our foreign exchange forward contracts generally mature within 90 days. The notional amounts of such contracts outstanding as of January 31, 2017 and October 31, 2016 were $245.7 million and $175.0 million, respectively. Gains on foreign exchange forward contracts not designated as cash flow hedges totaled $0.5 million and $4.3 million in the three months ended January 31, 2017 and 2016, respectively. |